Urgent Aim

"My judgment is that the time to begin is now."

With those words, President Kennedy last week launched his Administration on a campaign that will entangle it with many special interest groups, and require all his political skill. The goal: to liberalize U.S. trade policy so as to give the U.S. Government more power to negotiate tariffs with the increasingly successful European Common Market. "We have to begin to realize," said Kennedy, "how important the Common Market is going to be to the economy of the United States. The Common Market is going to present us with major economic challenges and, I hope, opportunities. This country must be ready to negotiate."

Every year U.S. business takes home $5 billion to $6 billion more from selling its exports abroad than it spends to buy imports--a trade surplus that vitally affects the U.S. balance of payments. One-third of all U.S. trade is with Western Europe, and the six-nation Common Market's policy of holding high tariff walls against outside nations while lowering the barriers among themselves is sure to cut heavily into the U.S. trade surplus. In order to barter for the lowering of those walls--and to increase U.S. trade with other nations--Kennedy wants to give foreign imports a better break.

The Administration has debated whether to seek a one-to-two-year extension of the present Reciprocal Trade Law or go all out to recast the law within a more modern and realistic framework designed to serve changing U.S. trade relations. Aware that even an extension of the law will be bitterly opposed by many U.S. industries that fear foreign competition, the Administration favors fighting for a broad new program rather than battling for an extension of the present tired one. The new proposals would:

> Give the President power to cut tariffs by 50% in return for comparable reductions by other nations, and to wipe out tariffs completely on some specified industrial goods.

> Eliminate the present "peril-point" clause, which sets a minimum tariff below which the domestic industry involved is held to be endangered.

> Work out some plan of adjustment to help industries, companies and workers who can prove damage from imports as a result of the new policy.

The Administration feels that there is little time to waste if the U.S. hopes to work with the Common Market before it hardens its position. If the U.S. should be denied the European market, warned Kennedy, "we will either find a flight of capital from this country to construct factories within that wall, or we will find ourselves in serious economic trouble. We cannot just sell and never buy." To convince the nation that the new trade laws would do far more good than harm--and are, in any case, essential to the U.S. role in the free world--the Administration is already bringing up big guns. Last week Treasury Secretary Douglas Dillon pleaded for new trade laws as being "crucial" to the nation's financial health, warned that the U.S. will be the loser if it elects protectionism over freer trade.

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